New York State Can Fuel Economic Growth by Investing in Industries of the Future, According to A.T. Kearney Study

NEW YORK (17 July 2007) - New York State could double its rate of job growth by focusing statewide and regional economic development investments on emerging sectors of the "Innovation Economy" such as nanotechnology, bioscience and cleantech, according to a report prepared by global management consulting firm A.T. Kearney for the state's Empire State Development organization.

The report recommends the state leverage the distinctive assets of each region—educational and research institutions, established and prospective employers, natural and human resources—and connect them together into a statewide, high-technology enabled commercial infrastructure.

A.T. Kearney estimates that focusing economic development investments on emerging sectors has the potential to create up to 330,000 new jobs by 2014, doubling the rate of job growth the state experienced between 2002 and 2006.  In addition, higher skilled jobs in the Innovation Economy pay, on average, twice what jobs outside the Innovation Economy pay and generate 3.5 additional jobs.

"New York's economic future will be shaped by its ability to attract and develop Innovation Economy sectors," said Jim Singer, an A.T. Kearney partner and leader of the study.  "Many of the requirements for a high technology infrastructure are already in place as distinctive assets of each region.  This infrastructure should be further built out through the combined efforts of the state, Empire State Development, businesses, investors and the academic and research communities."

The report recommends New York focus longer-term strategic economic development initiatives on sectors that meet three criteria: they must be technologically centered or enabled; they must compete globally; and they must be capable of building competitive advantage utilizing New York State's assets.

In addition, the state should also focus its efforts on continued development of mature sectors where New York is already a leader, such as financial services, insurance, media, arts and entertainment.  Many of these industries are under pressure to find low-cost location alternatives—locations the report suggests can be increasingly found in upstate New York as many offshore locations continue to face issues with rising labor costs and workforce-skill limitations.

The result, the report says, could be "a future in which both upstate and downstate New York are joined into 'One New York'—a unified statewide economic growth engine fueled by the development of a high technology infrastructure."

"I'd like to thank Jim Singer and his A.T. Kearney team for their hard work and dedication," said Patrick Foye, chairman of Empire State Development/Downstate. "We're gratified the report endorses steps we've already implemented, and we wholeheartedly agree that strategic thinking is needed to steer New York State's economy on the right course. The report will be an invaluable tool as we refocus broad economic policy and specific programs."

"First, let me recognize A.T. Kearney for providing this report on a pro bono basis.  Their efforts are certainly appreciated,"
stated Daniel C. Gundersen, chairman Empire State Development/Upstate.  "We can now take their report and use it as an important piece of input along with the perspectives we continue to gather from every Upstate region.  All of this will form our development of a comprehensive strategy that will focus on delivering economic results, particularly for Upstate."

"We firmly believe the innovation economy presents significant opportunity for New York to harvest its strengths and reignite growth," A.T. Kearney's Singer said.  "However it will take a collective effort by the Governor, Legislature and state agencies to reinvent the way the state goes about attracting and stimulating economic development."

The report was produced by A.T. Kearney, which was commissioned to provide fresh, objective and strategic business perspectives to Empire State Development.  In compiling the report, A.T. Kearney conducted interviews with 74 New York State-based executives from 65 companies and met with leaders of regional economic development organizations, legislators, professors and other subject matter experts.

Read the complete report.

About A.T. Kearney
A.T. Kearney is a global strategic management consulting firm known for helping clients gain lasting results through a unique combination of strategic insight and collaborative working style. The firm was established in 1926 to provide management advice concerning issues on the CEO's agenda. Today, we serve the largest global clients in all major industries.
A.T. Kearney's offices are located in major business centers in 33 countries.

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